Announcement PDF ASX ANNOUNCEMENT Date: 24 November 2015 Number: 444/241115 EXPLORATION UPDATE: MULGA TANK NICKEL-GOLD PROJECT W.A. Completion of three month programme of geophysical and soil geochemical surveys (Final assays and results of EM surveys from Broken Hill expected next week) An intensive and extensive three month exploration programme at Impact Minerals Limited’s (ASX:IPT) 100% owned Mulga Tank Project 200 km east of Kalgoorlie in Western Australia has now been completed. Exploration for nickel and gold has been re-invigorated on the project with the completion of three major surveys: an airborne magnetic and radiometric survey covering most of the 425 sq km project area; an innovative combined ground and airborne electrical survey; and the collection of 2,500 soil geochemistry samples. The data generated from this work will be mostly used to help define drill targets identified at the Mulga Tank Dunite and Panhandle Prospects in the western part of the project area. Airborne Magnetic and Radiometric Survey The airborne magnetic and radiometric survey was completed at a line spacing of 50 metres, four times greater detail than previously available data (Figure 1). Figure 1. Comparison of previous magnetic data (left) and new magnetic data (right) over the Mulga Tank Dunite showing the increased resolution of units within it. 26 Richardson Street West Perth Western Australia 6005 Tel +61 (8) 6454 6666 Facsimile +61 (8) 6454 6667 Email info@impactminerals.com.au www.impactminerals.com.au This new data has greatly improved the geological understanding of the entire project area and in particular over the Mulga Tank Dunite, highly prospective for large deposits of nickel sulphide, where individual geological layers can now for the first time be traced out (Figure 1). This is important because the entire project lies under deep sand cover at least 50 metres thick in most places. A detailed interpretation of this data is in progress. Ground and Airborne Electrical Survey A innovative combined airborne and ground electrical survey has been completed between and including the Panhandle and Mulga Tank Dunite Prospects that covers about 15 km of strike of nickel prospective rocks for a total area of about 70 square kilometres. The survey was completed by GAP Geophysics and involved the HeliSAM ground-air system in a variety of configurations. The purpose of the survey was to help identify units of metasedimentary rocks under the thick sand cover that contain massive iron sulphides that are generally barren of nickel (or copperzinc-lead) sulphide. These units generate a significant number of false anomalies for nickel sulphides in conventional electromagnetic surveys. Final data is expected within two weeks. Soil Geochemistry Survey Approximately 1,000 soil samples have been taken over the eastern half of the Mulga Tank Dunite at a spacing of 200 m by 50 m and 1,500 samples have been taken over the Panhandle Prospect at a spacing of 100 m by 50 metres. Selected samples from areas of interest identified in the new geophysical data will be sent for assay in December. About the Mulga Tank Project The Mulga Tank Project lies in the Minigwal greenstone belt 200 km north east of Kalgoorlie (Figure 2). Impact discovered high tenor nickel and copper sulphides at the Mulga Tank Dunite in its maiden drill program in 2013 (see announcement 31 January 2014). Three styles of nickel-copper mineralisation were identified: 1. Extensive disseminated nickel in the Mulga Tank Dunite with assays of: 2 m at 1.3% nickel including 1 m at 2% nickel and multiple 0.5 m thick zones of 0.5% to 1.2% nickel within an intercept of 115 m at 0.3% nickel; other thick intercepts including 21 m at 0.4% nickel and 59 m at 0.3% nickel. 2. High tenor veins at the base of the Mulga Tank Dunite with assays of: 0.25 m at 3.8% nickel, 0.7% copper and 0.7 g/t PGE and 0.3 m at 0.7% nickel; and 3. High tenor nickel sulphide in multiple komatiites in a flow channel in the upper part of the dunite with assays of: 0.75 m at 0.85% nickel, 0.35% copper and 0.28 g/t PGE (Pt+Pd+Au); and 6.7 m at 0.5% nickel. The style of mineralisation and the nature of the rocks are similar to those that host the significant nickel deposits at Perseverance (1 Mt of contained nickel) and Mt Keith (>2 Mt of contained nickel) near Leinster in WA (Figure 2). In addition the project area occurs in the same geological terrane as the recently discovered Gruyere deposit of more than 5 million ounces of gold (Figure 2). The Mulga Tank project has been poorly explored for gold and this will also be a focus of the forward program. Update on the Broken Hill Project Down hole EM data and assays from the final two drill holes at the Red Hill Prospect (RHD018 and 019) are expected by early next week. Applications for statutory environmental permits have been lodged for drilling at the Platinum Springs Prospect where a strong EM conductor has been identified (see announcement dated 11 November 2015). Approvals are expected by mid December, possibly sooner. Dr Michael G Jones Managing Director The review of exploration activities and results contained in this report is based on information compiled by Dr Mike Jones, a Member of the Australian Institute of Geoscientists. He is a director of the company and works for Impact Minerals Limited. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Mike Jones has consented to the inclusion in the report of the matters based on his information in the form and context in which it appears. Figure 2. Location of the Mulga Tank Project and major nickel mines in central WA together with recent gold discoveries at Tropicana and Gruyere. APPENDIX 1 - SECTION 1 SAMPLING TECHNIQUES AND DATA Criteria JORC Code explanation Sampling techniques Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. The soil samples were taken at a depth of 15 – 20 cm below surface and sieved to -2mm mesh size. The targets at Mulga Tank have been drilled by Reverse Circulation (RC) and diamond drill holes (DD). Eight holes for 3,025 m were completed. A hand held Olympus XRF machine was used to take multi-element readings on the samples bags from the RC drill pre-collars (I reading every I metre) and at 25 cm to 50 cm intervals on the diamond core. These readings are a guide only and do not constitute an accurate or precise assay. Impact has conducted a number of quality control experiments to determine the optimal reading time and number of readings per sample site. A correlation of these readings against the assay data suggests that at values greater than 1% nickel, the XRF analyser gives a good approximation to the chemical assay value. Drill holes were oriented to intersect the dip of electromagnetic conductors as interpreted by Impact’s consultants Newexco. Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used RC samples have been collected by riffle splitter. Diamond core was used to obtain high quality samples that were logged for lithological, structural, alteration and other attributes. Sampling was carried out under Impact Minerals Ltd protocols and QAQC procedures as per industry best practice. A combination of mapping, soil geochemistry, airborne magnetic data and ground EM surveys identified the Mulga Tank target. Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information Diamond core is mostly NQ2 size, sampled on geological intervals cut into half core to give sample weights under 3 kg. Reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised. Samples were crushed, dried and pulverised (total prep) to produce a sub-sample for analysis by four acid digest with an ICP/OES finish for base metals and lead collection fire assay with AAS finish for precious metals. The main sulphide types are expected to be pentlandite and chalcopyrite, with pyrite, and minor sphalerite. Non-sulphide nickel species in weathered and transitional material have not yet been identified. Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc). Diamond drilling accounts for 75 % of the drilling and comprises HQ and NQ2 sized core. Precollar depths range from 50 m to about 150 m and hole depths range from 300 m to 570 m. The core was oriented using a down-hole orientation tool at the end of every run with 70% of orientations rated as “good”. RC drilling in the pre-collar accounts for 20 % of the total drilling and comprises 140 mm diameter face sampling hammer drilling. Method of recording and assessing core and chip sample recoveries and results assessed Diamond core and RC recoveries are logged and recorded in the database. Overall recoveries are >95% for Mulga Tank and there are no core loss issues or significant sample recovery problems. Drilling techniques Drill sample recovery Commentary Criteria Logging Sub-sampling techniques and sample preparation JORC Code explanation Commentary Measures taken to maximise sample recovery and ensure representative nature of the samples Diamond core at Mulga Tank is reconstructed into continuous runs on an angle iron cradle for orientation marking. Depths are checked against the depth given on the core blocks and rod counts are routinely carried out by the drillers. RC samples were visually checked for recovery, moisture and contamination. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. No sample bias has been established because an insufficient number of samples have been assayed. Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Information on structure type, dip, dip direction, alpha angle, beta angle, texture, shape and fill material is stored in the structure table of the database. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. Logging of diamond core and RC samples at Mulga Tank recorded lithology, mineralogy, mineralisation, structural (DDH only), weathering, colour and other features of the samples. Core was photographed in both dry and wet form. The total length and percentage of the relevant intersections logged All drillholes were logged in full, apart from rock roller diamond hole pre-collar intervals of between about 50 m and 70 m depth. If core, whether cut or sawn and whether quarter, half or all core taken. Core for Mulga Tank was cut in half onsite using an automatic core saw. All samples were collected from the same side of the core. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. RC samples were split using a riffle splitter. For all sample types, the nature, quality and appropriateness of the sample preparation technique. The sample preparation of diamond core for Mulga Tank follows industry best practice in sample preparation involving oven drying, coarse crushing of the half core sample down to ~10 mm followed by pulverisation of the entire sample (total prep) using Essa LM5 grinding mills to a grind size of 85% passing 75 micron. The sample preparation for RC samples is identical, without the coarse crush stage. Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. Field QC procedures involve the use of certified reference material as assay standards, along with blanks, duplicates and barren washes. The insertion rate of these averaged 1:50. Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. Field duplicates are done every 50 samples. Whether sample sizes are appropriate to the grain size of the material being sampled. The sample sizes are considered to be appropriate to correctly represent the sulphide mineralisation at Mulga Tank based on the disseminated style of mineralisation, the thickness and consistency of the intersections, the sampling methodology and percent value assay ranges for the primary elements. Criteria Quality of assay data and laboratory tests Verification of sampling and assaying JORC Code explanation Commentary The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. See optiro. An industry standard fire assay technique using lead collection with an Atomic Absorption Spectrometry (AAS) finish was used for Au, Ag, Pt, Pd. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. No geophysical tools were used to determine material element concentrations. Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established. Quality control procedures for assays are as per Impact Minerals protocols. Accuracy and precision are within acceptable limits. The verification of significant intersections by either independent or alternative company personnel. Significant intersections have yet to be returned and therefore verification is not required. The use of twinned holes. No twin holes have been drilled at Mulga Tank. Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Primary data was collected using a set of standard Excel templates on Toughbook laptop computers using lookup codes. The information was sent to IOGlobal/Reflex for validation and compilation into a SQL database server. Discuss any adjustment to assay data. Location of data points Data spacing and distribution Orientation of data in relation to geological structure Accuracy and quality of surveys used to locate drillholes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. Drill holes and soil sample sites were located by hand held GPS. Down-hole surveys used single shot readings have been completed during drilling at least at 50 m intervals. Specification of the grid system used. The grid system for Mulga Tank is MGA_GDA94, Zone 51. Quality and adequacy of topographic control. Standard government topographic maps and hand held GPS have been used for topographic control. The land surface is flat and increased accuracy and precision for topographic contours is not required at this stage. Data spacing for reporting of Exploration Results. This is a first pass reconnaissance drill programme designed to test geochemical and geophysical anomalies. Drill spacing is adequate for that and will change according to on-going results. Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. This is a first pass reconnaissance drill programme designed to test geochemical and geophysical anomalies. Drill spacing is adequate for that and will change according to on-going results. Whether sample compositing has been applied. Samples will be composited to one metre lengths and adjusted where necessary to ensure that no residual sample lengths have been excluded (best fit). Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. The targets have been drilled sub-perpendicular to mineralisation within the stratigraphy, but subparallel to the orientation of some veins in the mineralised trend. Structural logging based on oriented core to determine the controls on mineralisation are on-going. Criteria JORC Code explanation Commentary If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material. No orientation based sampling bias has been identified at Mulga Tank in the data at this point, although the vertical sulphide veins may cause hole orientations to be changed in future drill programmes. Sample security The measures taken to ensure sample security. Chain of custody is managed by Impact Minerals Ltd. Samples for Mulga Tank are stored on site and delivered by Impact Minerals Ltd personnel to Kalgoorlie for initial sample preparation by Genalysis who then transport the samples to Perth for assay. Whilst in storage, they are kept in a locked yard. Tracking sheets have been set up to track the progress of batches of samples. Audits or reviews The results of any audits or reviews of sampling techniques and data. At this stage of exploration a review of the sampling techniques and data by an external party is not warranted. An internal review of the sampling techniques and data will be completed at the end of the current programme. SECTION 2 REPORTING OF EXPLORATION RESULTS Criteria Mineral tenement and land tenure status Exploration done by other parties JORC Code explanation Commentary Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The Mulga Tank Project comprises 13 exploration licences covering 425 km2. Mulga Tank is located wholly within Exploration Licence E39/988. Impact Minerals Ltd (IPT) has a 20% interest in the tenement with Golden Cross Resources Limited (GCR: 80%). There is no Native Title Claim over the licence. The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. The tenement is in good standing with no known impediments. IPT has the right to earn 70% ownership with $1.9M expenditure commitment before November 2017. Acknowledgment and appraisal of exploration by other parties. Limited bedrock-cover interface percussion drilling completed by previous explorers focused on the southern contact of the dunite, a circular, strongly magnetic feature 3.5 km by 4 km in diameter that is interpreted to represent a flat-lying ultramafic sill. A total of 28 RC and 4 diamond holes were completed. Deposit type, geological setting and style of mineralisation. Mulga Tank is interpreted as an ultramafic hosted primary magmatic nickel sulphide deposit, similar in style to the Perseverance and Rocky’s Reward nickel mines at Leinster in Western Australia. The Mulga Tank Dunite is also similar to the unit that hosts the Mount Keith disseminated nickel sulphide deposit. There are two prospective units (Upper and Lower) that host the initial sulphide intersections at a depth of 300 and 350 metres vertically (respectively). Geology Criteria Drill hole Information Data aggregation methods JORC Code explanation Commentary A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:  easting and northing of the drill hole collar  elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar  dip and azimuth of the hole  down hole length and interception depth  hole length. Refer to Table 2 in body of text. Further details are not material for this early stage of exploration. In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated. All reported assays have been length weighted. No top outs have been applied. A nominal cutoff of 0.3% to 0.5% nickel has been applied. Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. High grade massive sulphide intervals internal to broader zones of sulphide mineralisation are reported as included intervals. The assumptions used for any reporting of metal equivalent values should be clearly stated. No metal equivalent values are used for reporting exploration results. Relationship between mineralisation widths and intercept lengths These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’). Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views. Refer to Figures in body of text. Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results. All results reported are representative Balanced reporting The Mulga Tank deposit is a flat lying ultramafic sill. Holes to date have been sub-vertical and whilst this is perpendicular to stratigraphy, steeply dipping sulphide veins are at a sub-optimal orientation to the drillhole. Criteria JORC Code explanation Other substantive exploration data Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances. Further work The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive Commentary The drill targets at Mulga Tank have been ranked on the basis of soil geochemistry and ground EM results. Information on structure type, dip, dip direction, alpha angle, beta angle, texture, shape, roughness and fill material is stored in the structure table of the database. Follow up work programmes will be subject to interpretation of assay results which is ongoing.